When it comes to owning commercial property, there are a multitude of costs and fees that owners are responsible for. One such fee that can often catch property owners off guard is the rates on empty commercial property. These rates, also known as business rates, can be a significant financial burden for property owners, especially if their property sits vacant for an extended period of time. Understanding how rates on empty commercial property are calculated and what options are available for property owners can help navigate and potentially reduce this financial obligation.
Business rates are a tax that is charged on most non-domestic properties in the UK. These rates are used to help fund local services and are based on the rateable value of the property. The rateable value is an estimate of the amount the property could be rented out for on the open market as of a certain date. The higher the rateable value of the property, the higher the business rates that will be charged to the property owner.
For empty commercial properties, the rules around business rates can be a bit different. In most cases, property owners are still required to pay business rates on empty commercial properties, but there are some exceptions that may apply. For example, properties that are exempt from business rates include those with a rateable value of £2,900 or less, properties that are used for certain agricultural purposes, and properties that are considered a listed building.
Property owners may also be eligible for certain reliefs or discounts on their business rates for empty properties. For example, property owners may be eligible for a 100% relief on their business rates for the first three months that their property sits empty. After this initial three-month period, most property owners will be required to pay the full business rates on their empty property. However, there are some circumstances in which property owners may be eligible for additional relief or discounts on their business rates.
One option for property owners with empty commercial properties is to apply for what is known as the “hardship relief”. This relief is intended for property owners who are experiencing financial hardship due to the business rates on their empty property. Property owners must meet certain criteria to qualify for hardship relief, and the relief is typically granted for a limited period of time.
Another option for property owners is to consider leasing or selling their empty commercial property. By finding a tenant or buyer for the property, property owners may be able to reduce or eliminate the business rates on their empty property. Property owners may also want to consider making improvements to the property to make it more attractive to potential tenants or buyers.
In some cases, property owners may be able to appeal the rateable value of their empty commercial property in order to lower their business rates. Property owners can do this by contacting the Valuation Office Agency (VOA) and providing evidence to support their appeal. If successful, property owners may be able to reduce the amount of business rates they are required to pay on their empty property.
It is important for property owners to be aware of their obligations when it comes to business rates on empty commercial properties. Failure to pay these rates can result in penalties and legal action from the local authorities. Property owners should also be proactive in seeking out any potential relief or discounts that may be available to them.
In conclusion, rates on empty commercial property can be a significant financial burden for property owners. By understanding how these rates are calculated and exploring options for relief, property owners can better navigate this financial obligation. Whether it’s applying for hardship relief, leasing or selling the property, or appealing the rateable value, property owners have options for managing the costs associated with empty commercial properties.